EURUSD Daily Outlook 06 Mar 2012

As shown on the 4 hour chart above, the pair is trading around the sloping support line of the upward channel of the rally 1.2625/1.3485, according to momentum indicators strong pullback is on the horizon, on daily Williams is trying to find support around 1.3170, a daily close above yesterday's high 1.3240 is gonna give us a light bullish trend on daily - trend continuation of the previous swing at 1.2975 and the the pair should attack 1.3485 very soon...

A daily close below 1.3159 yesterday's low is gonna test/break the previous swing at 1.2975 on daily !

On 4 hour , a close below 1.3120 is gonna eliminate any positivity and should test 1.2975 very easy!

The last note , yesterday the pair found resistance at 1.3236, a clear break above this level (high & low) is supposed to attack /test 1.3365 very easy or even 1.3485....

Trend direction is upward, the trend will remain valid as long as 1.3170 holds , a daily close below level may test 1.2975 .

Support: 1.3170, 1.3120, 1.3040, 1.3000, 1.2975

Resistance: 1.3236, 1.3280, 1.3365, 1.3425, 1.3485

Recommendations: Upon the chart and the explanation posted above, my recommendations are;

I think the EURO will go up and strongly, this is not the time to resume the downtrend, I think the pair will keep going up till the elections end of April 2012 , then we'll figure out, the pair will continue flying or move sideways , or resume the downtrend ...

Yesterday, the pair broke below the sloping support line of the uptrend channel on daily chart of the rally 1.2625 - 1.3485, and closed at 1.3120, I have to admit, yes this is negative but I still have valid swing on daily at 1.2975 still proctoring the upward move , so any bearish move above this level is vulnerable and strong pullback may seen any moment..

so below 1.3170/50 we have light bearish trend , according to 60 min chart a bullish correction is suggested toward 1.3140/60 before heading down below 1.3100 level BUT on 15 min , possible swing entry on the horizon at 1.3132, this could be normal bullish correction or beginning of new upward trend, If you wanna short around 1.3140/60 it's up to you , don't make your stop more than 1.3250, for me I prefer selling the pair below 1.3100...

Lots of bearish divergences around 1.3150 level on 15 min chart, break below 1.3132 should test 1.3100 and add strong negative pressure on the pair, If this level is taken out , I guess the pair should easily test 1.3040/30 ?!!

Yes it can go beyond 1.3165 but according to RSI on 30 min a drop around 1.3150/60 is suggested at least 30 pips before breaking above 1.3165...above 1.3165 we have strong resistance 1.3240 , so the pair may top between 1.3165 - 1.3240...

As shown on the 4 hour chart above , to keep the downtrend valid, the level 1.3240 must hold, If this important resistance is taken out , I think that would eliminate the negativity of the double top pattern, and the pair would test 1.3350 or break above this level ?!!